Do your moving expenses qualify as a tax deduction?
Is it just a long distance move that is tax deductible or are local moves tax deductible?
This is a great question. Often customers move from as an example from Brampton to Scarborough because of a new job and don't think about a tax deduction but it most likely would be tax deductible! Of course revenue Canada has the last say but the rules are You must have commenced work or carried on a business at your new location. In addition, your new residence must be at least 40 kilometres closer to your new work location.
Any move more than 40 km closer to your work or new place of employment- Across the GTA, Provincial or Cross Country moving is deductible under the conditions set forth by Revenue Canada. (Revenue Canada Link at bottom of page)
So it isn't just long distance moving only that benifits from this great tax dedcution! Just as long as you match the following criteria you can save on your next years tax as you can only claim for the year you move in? You may have moved in the last 7 years and this applies you can go back up to 7 years and submit moving costs.
You must have commenced work or carried on a business at your new location. In addition, your new residence must be at least 40 kilometres closer to your new work location.
Eligible moving expenses include: your travelling expenses incurred in connection with the move, the cost of transporting your household goods, the cost of meals and temporary accommodation for a period not exceeding 15 days, the costs of selling your old residence, or if you were renting, the cost of breaking your lease, and in some cases, legal fees and land transfer taxes paid in connection with the purchase of the new residence. You cannot deduct any loss incurred on the sale of your former residence.
Moving expenses that have been paid by your employer cannot be claimed by you as a deduction. If your employer pays or reimburses you for part of your moving expenses, you may deduct all of your eligible moving expenses but must report the amounts paid by your employer as income. Your eligible expenses are only deductible from your income earned at the new location. Amounts not deducted in the year of the move may be carried forward to the next year.
If your employer reimburses you for a loss incurred on the sale of your former residence, the amount is not normally required to be included in income.
If you are a student, you can also claim moving expenses if you move to begin a job (including a summer job) or to start a business. If you move to attend a full4ime post-secondary institution, you can deduct the expenses, but only to the extent of your scholarship or research grant income.
Copy or click on this link to go to the Revenue Canada T1-m tax form http://www.cra-arc.gc.ca/E/pbg/tf/t1-m/README.html